CANADA FX DEBT-C$ hits lowest in 14 weeks, bonds rise after CPI

   * Canadian dollar falls as low as 93 U.S. cents

 * Bond prices climb in flight to safety

 * Canada April inflation tops forecast at 1.8 pct

 TORONTO, May 21 (Reuters) - Canada's dollar hit its weakest
level in 14-weeks against the U.S. dollar on Friday as European
worries more than offset slightly higher than expected Canadian
inflation data that kept alive the possibility of a June 1
interest rate hike.

 The currency slumped as low as C$1.0753 to the U.S. dollar,
or 93.00 U.S. cents, its lowest since Feb. 9, as market players
weighed the data against persistent global worries.

 The consumer price index gained 0.3 percent in the month
for an annual inflation rate of 1.8 percent, Statistics Canada
said. The rate quickened from 1.4 percent in March and topped
the consensus forecast of 1.7 percent. [ID:nN21149251]

 Core CPI, which excludes volatile items like gasoline and
closely monitored by the Bank of Canada, climbed 0.3 percent in
the month for an annual rate of 1.9 percent, driven mostly by
vehicle prices. Analysts had forecast a 1.8 percent rate.

 "It doesn't answer the question as to whether or not the
Bank of Canada goes on June 1. I think that's what most traders
are looking at: 'Is this number going to be a decisive enough
reason to move on June 1?'" said Jack Spitz, managing director
of foreign exchange at National Bank Financial.

 "And setting aside the other factors that are influencing
the markets, being risk on, risk off, equities, uncertainties
with respect to Europe, China, global growth concerns, they
remain very, very much influential in what will likely be a
decision that will come right down to June 1 for the Bank of
Canada."

 The data kept market expectations, as measured by yields on
overnight index swaps, about evenly split on whether the Bank
of Canada raises interest rates next month. BOCWATCH

 At 7:53 a.m. (1153 GMT), the Canadian dollar CAD=D4 was
at C$1.0726 to the U.S. dollar, or 93.23 U.S. cents, down from
C$1.0678, or 93.65 U.S. cents, at Thursday's close. It was
trading at C$1.0696, or 93.49 U.S. cents just before the data.

 Canadian bonds prices climbed after the data, adding to
gains as European equity markets fell and U.S. stock index
futures pointed to a lower open as well.
 (Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)